Exam
Practice
Study
Questions
Guide 2026//2027
with Solutions
Answers ?Manual
:Page
A+Grade
1
forofAdvanced
- 157-
SolutionsFinancial
Manual for
Accounting
AdvancedinFinancial
Canada,Accounting
1st CanadainEdition
Canada,by 1st
Johnstone
CanadaNathalie.pdf
Edition by Johnstone
Exam Study
Nathalie
Guide
SOLUTIONS MANUAL FOR
Solutions
2/1/2026Manual
Practice
for Questions
Advanced
Solutions
with
Financial
Manual
Answers
Accounting
for
? Advanced
A+Grade
in Canada,
Financial
1stAccounting
Canada Edition
in Canada,
by Johnstone
1st Canada
Nathalie.pdf
Edition byPractice
Johnstone
Questions
Nathalie
with Answers ? A+Grade
, Exam
Practice
Study
Questions
Guide 2026//2027
with Solutions
Answers ?Manual
:Page
A+Grade
2
forofAdvanced
- 157-
SolutionsFinancial
Manual for
Accounting
AdvancedinFinancial
Canada,Accounting
1st CanadainEdition
Canada,by 1st
Johnstone
CanadaNathalie.pdf
Edition by Johnstone
Exam Study
Nathalie
Guide
Solutions Manual for Advanced Financial Accounting in Canada, 1st Canada Edition by Johnstone Nathalie
Chapter 01:
Introduction to Advanced Financial Accounting
1.1 Describe the accounting standards used in Canada and how they apply to
different reporting entities.
1) A private company in Canada that is closely held, has no debt, and wants to simplify the
accounting process is most likely to report under which part of the CPA Canada
Handbook?
A) Part II — Accounting Standards for Private Enterprises (ASPE)
B) Part IV — Accounting Standards for Pensions
C) Part I — International Financial Reporting Standards (IFRS)
D) Part III — Accounting Standards for Not-for-Profit Organizations
SELECTED ANSWER: A Diff: 1 Type: MC
Taxonomy Category: Understanding
Learning Outcome: 1.1 Describe the accounting standards used in Canada and how they apply
to different reporting entities.
2) In Canada, a private company has the choice to report under International Financial
Reporting Standards (IFRS) or Accounting Standards for Private Enterprises (ASPE).
Describe why the CPA Canada Handbook provides the option for private enterprises?
SELECTED ANSWER: IFRS is meant to create consistency and comparability in
international markets. One of the limitations of IFRS is the complexity of reporting for equity
investments that are meant to provide information to shareholders for decision-making
purposes. Many private companies are held by a small group of shareholders who are often
involved in the running of the business or have access to that information. As a result, the cost
of applying more complex accounting policies outweighs the benefit of the information
provided to this closely held group of shareholders. To address this, the Accounting Standards
Board developed the Accounting
Solutions
2/1/2026Manual
Practice
for Questions
Advanced
Solutions
with
Financial
Manual
Answers
Accounting
for
? Advanced
A+Grade
in Canada,
Financial
1stAccounting
Canada Edition
in Canada,
by Johnstone
1st Canada
Nathalie.pdf
Edition byPractice
Johnstone
Questions
Nathalie
with Answers ? A+Grade
, Exam
Practice
Study
Questions
Guide 2026//2027
with Solutions
Answers ?Manual
:Page
A+Grade
3
forofAdvanced
- 157-
SolutionsFinancial
Manual for
Accounting
AdvancedinFinancial
Canada,Accounting
1st CanadainEdition
Canada,by 1st
Johnstone
CanadaNathalie.pdf
Edition by Johnstone
Exam Study
Nathalie
Guide
Standards for Private Enterprises to meet the needs of private enterprises. Private enterprises
have the option to adopt IFRS or ASPE depending on the needs of the financial statement
users.
Diff: 2 Type: ES
Taxonomy Category: Understanding
Learning Outcome: 1.1 Describe the accounting standards used in Canada and how they apply
to different reporting entities.
3) What are the four parts of the CPA Canada Handbook — Accounting and which entities
are they applicable to?
SELECTED ANSWER: The four parts are:
• Part I — International Financial Reporting Standards (IFRS) — applicable to publicly
accountable, private, or not-for-profit entities.
• Part II — Accounting Standards for Private Enterprises (ASPE) — applicable to private
entities.
• Part III — Accounting Standards for Not-for-Profit Organizations — applicable to not-
for-profit entities.
• Part IV — Accounting Standards for Pension Plans — applicable to pension plans.
Diff: 1 Type: ES
Taxonomy Category: Remembering
Learning Outcome: 1.1 Describe the accounting standards used in Canada and how they apply
to different reporting entities.
1.2 Discuss the conceptual framework for financial reporting and the general purpose
of financial reporting.
1) In 2011, Canada adopted International Financial Reporting Standards (IFRS) for publicly
accountable enterprises. Explain the rationale for adopting IFRS in Canada.
SELECTED ANSWER: As the global economy expanded, the Accounting Standards Board
(AcSB) chose to adopt IFRS in Canada to improve consistency and comparability in the
international capital markets.
Diff: 1 Type: ES
Solutions
2/1/2026Manual
Practice
for Questions
Advanced
Solutions
with
Financial
Manual
Answers
Accounting
for
? Advanced
A+Grade
in Canada,
Financial
1stAccounting
Canada Edition
in Canada,
by Johnstone
1st Canada
Nathalie.pdf
Edition byPractice
Johnstone
Questions
Nathalie
with Answers ? A+Grade
, Exam
Practice
Study
Questions
Guide 2026//2027
with Solutions
Answers ?Manual
:Page
A+Grade
4
forofAdvanced
- 157-
SolutionsFinancial
Manual for
Accounting
AdvancedinFinancial
Canada,Accounting
1st CanadainEdition
Canada,by 1st
Johnstone
CanadaNathalie.pdf
Edition by Johnstone
Exam Study
Nathalie
Guide
Taxonomy Category: Understanding
Learning Outcome: 1.2 Discuss the conceptual framework for financial reporting and the
general purpose of financial reporting.
1.3 Define and identify strategic and non-strategic intercorporate investments made by
reporting entities.
1) Laliberte Products Ltd. (LPL), a public company, made several equity investments in the
current year. Which of the following investments would most likely be classified as an
associate in LPL's financial statements?
A) 25,000 of the 30,000 outstanding voting common shares of Glabman Inc. There are
significant intercompany transactions between the two companies.
B) 13,500 of the 45,000 outstanding voting common shares of CCL Ltd. There are
significant intercompany transactions between the two companies.
C) 1,000 of the 20,000 outstanding voting common shares of Petruck Inc. There are no
transactions between the two corporations and LPL plans to hold these shares for less
than a year.
D) 3,000 of the 3,500 outstanding non-voting preferred shares of Paradise Ltd. There is a
small number of intercompany transactions between the two companies.
SELECTED ANSWER: B
Diff: 2 Type: MC
Taxonomy Category: Analyzing
Learning Outcome: 1.3 Define and identify strategic and non-strategic intercorporate
investments made by reporting entities.
2) What is the definition of control provided in IFRS 10?
SELECTED ANSWER: IFRS 10 states that an investee has control only when all of the
following three criteria are met: The power over the investee, exposure to the variable returns
of the investee, and the ability to use that power to affect the earnings of the investee. First,
the power to direct the relevant activities over the investee typically arises from a right such
as voting rights, the right to choose key personnel or enforcement/veto rights. Power over the
relevant activities would include the ability to direct the selling or buying of goods and
services, direct research and development, budgeting, and the management of financial assets.
Second, variable returns are defined as not fixed and with the potential to vary as a result of
the performance of the investee. Finally, there must be a link between the power to control the
relevant activities and the return on the investment.
Solutions
2/1/2026Manual
Practice
for Questions
Advanced
Solutions
with
Financial
Manual
Answers
Accounting
for
? Advanced
A+Grade
in Canada,
Financial
1stAccounting
Canada Edition
in Canada,
by Johnstone
1st Canada
Nathalie.pdf
Edition byPractice
Johnstone
Questions
Nathalie
with Answers ? A+Grade
Practice
Study
Questions
Guide 2026//2027
with Solutions
Answers ?Manual
:Page
A+Grade
1
forofAdvanced
- 157-
SolutionsFinancial
Manual for
Accounting
AdvancedinFinancial
Canada,Accounting
1st CanadainEdition
Canada,by 1st
Johnstone
CanadaNathalie.pdf
Edition by Johnstone
Exam Study
Nathalie
Guide
SOLUTIONS MANUAL FOR
Solutions
2/1/2026Manual
Practice
for Questions
Advanced
Solutions
with
Financial
Manual
Answers
Accounting
for
? Advanced
A+Grade
in Canada,
Financial
1stAccounting
Canada Edition
in Canada,
by Johnstone
1st Canada
Nathalie.pdf
Edition byPractice
Johnstone
Questions
Nathalie
with Answers ? A+Grade
, Exam
Practice
Study
Questions
Guide 2026//2027
with Solutions
Answers ?Manual
:Page
A+Grade
2
forofAdvanced
- 157-
SolutionsFinancial
Manual for
Accounting
AdvancedinFinancial
Canada,Accounting
1st CanadainEdition
Canada,by 1st
Johnstone
CanadaNathalie.pdf
Edition by Johnstone
Exam Study
Nathalie
Guide
Solutions Manual for Advanced Financial Accounting in Canada, 1st Canada Edition by Johnstone Nathalie
Chapter 01:
Introduction to Advanced Financial Accounting
1.1 Describe the accounting standards used in Canada and how they apply to
different reporting entities.
1) A private company in Canada that is closely held, has no debt, and wants to simplify the
accounting process is most likely to report under which part of the CPA Canada
Handbook?
A) Part II — Accounting Standards for Private Enterprises (ASPE)
B) Part IV — Accounting Standards for Pensions
C) Part I — International Financial Reporting Standards (IFRS)
D) Part III — Accounting Standards for Not-for-Profit Organizations
SELECTED ANSWER: A Diff: 1 Type: MC
Taxonomy Category: Understanding
Learning Outcome: 1.1 Describe the accounting standards used in Canada and how they apply
to different reporting entities.
2) In Canada, a private company has the choice to report under International Financial
Reporting Standards (IFRS) or Accounting Standards for Private Enterprises (ASPE).
Describe why the CPA Canada Handbook provides the option for private enterprises?
SELECTED ANSWER: IFRS is meant to create consistency and comparability in
international markets. One of the limitations of IFRS is the complexity of reporting for equity
investments that are meant to provide information to shareholders for decision-making
purposes. Many private companies are held by a small group of shareholders who are often
involved in the running of the business or have access to that information. As a result, the cost
of applying more complex accounting policies outweighs the benefit of the information
provided to this closely held group of shareholders. To address this, the Accounting Standards
Board developed the Accounting
Solutions
2/1/2026Manual
Practice
for Questions
Advanced
Solutions
with
Financial
Manual
Answers
Accounting
for
? Advanced
A+Grade
in Canada,
Financial
1stAccounting
Canada Edition
in Canada,
by Johnstone
1st Canada
Nathalie.pdf
Edition byPractice
Johnstone
Questions
Nathalie
with Answers ? A+Grade
, Exam
Practice
Study
Questions
Guide 2026//2027
with Solutions
Answers ?Manual
:Page
A+Grade
3
forofAdvanced
- 157-
SolutionsFinancial
Manual for
Accounting
AdvancedinFinancial
Canada,Accounting
1st CanadainEdition
Canada,by 1st
Johnstone
CanadaNathalie.pdf
Edition by Johnstone
Exam Study
Nathalie
Guide
Standards for Private Enterprises to meet the needs of private enterprises. Private enterprises
have the option to adopt IFRS or ASPE depending on the needs of the financial statement
users.
Diff: 2 Type: ES
Taxonomy Category: Understanding
Learning Outcome: 1.1 Describe the accounting standards used in Canada and how they apply
to different reporting entities.
3) What are the four parts of the CPA Canada Handbook — Accounting and which entities
are they applicable to?
SELECTED ANSWER: The four parts are:
• Part I — International Financial Reporting Standards (IFRS) — applicable to publicly
accountable, private, or not-for-profit entities.
• Part II — Accounting Standards for Private Enterprises (ASPE) — applicable to private
entities.
• Part III — Accounting Standards for Not-for-Profit Organizations — applicable to not-
for-profit entities.
• Part IV — Accounting Standards for Pension Plans — applicable to pension plans.
Diff: 1 Type: ES
Taxonomy Category: Remembering
Learning Outcome: 1.1 Describe the accounting standards used in Canada and how they apply
to different reporting entities.
1.2 Discuss the conceptual framework for financial reporting and the general purpose
of financial reporting.
1) In 2011, Canada adopted International Financial Reporting Standards (IFRS) for publicly
accountable enterprises. Explain the rationale for adopting IFRS in Canada.
SELECTED ANSWER: As the global economy expanded, the Accounting Standards Board
(AcSB) chose to adopt IFRS in Canada to improve consistency and comparability in the
international capital markets.
Diff: 1 Type: ES
Solutions
2/1/2026Manual
Practice
for Questions
Advanced
Solutions
with
Financial
Manual
Answers
Accounting
for
? Advanced
A+Grade
in Canada,
Financial
1stAccounting
Canada Edition
in Canada,
by Johnstone
1st Canada
Nathalie.pdf
Edition byPractice
Johnstone
Questions
Nathalie
with Answers ? A+Grade
, Exam
Practice
Study
Questions
Guide 2026//2027
with Solutions
Answers ?Manual
:Page
A+Grade
4
forofAdvanced
- 157-
SolutionsFinancial
Manual for
Accounting
AdvancedinFinancial
Canada,Accounting
1st CanadainEdition
Canada,by 1st
Johnstone
CanadaNathalie.pdf
Edition by Johnstone
Exam Study
Nathalie
Guide
Taxonomy Category: Understanding
Learning Outcome: 1.2 Discuss the conceptual framework for financial reporting and the
general purpose of financial reporting.
1.3 Define and identify strategic and non-strategic intercorporate investments made by
reporting entities.
1) Laliberte Products Ltd. (LPL), a public company, made several equity investments in the
current year. Which of the following investments would most likely be classified as an
associate in LPL's financial statements?
A) 25,000 of the 30,000 outstanding voting common shares of Glabman Inc. There are
significant intercompany transactions between the two companies.
B) 13,500 of the 45,000 outstanding voting common shares of CCL Ltd. There are
significant intercompany transactions between the two companies.
C) 1,000 of the 20,000 outstanding voting common shares of Petruck Inc. There are no
transactions between the two corporations and LPL plans to hold these shares for less
than a year.
D) 3,000 of the 3,500 outstanding non-voting preferred shares of Paradise Ltd. There is a
small number of intercompany transactions between the two companies.
SELECTED ANSWER: B
Diff: 2 Type: MC
Taxonomy Category: Analyzing
Learning Outcome: 1.3 Define and identify strategic and non-strategic intercorporate
investments made by reporting entities.
2) What is the definition of control provided in IFRS 10?
SELECTED ANSWER: IFRS 10 states that an investee has control only when all of the
following three criteria are met: The power over the investee, exposure to the variable returns
of the investee, and the ability to use that power to affect the earnings of the investee. First,
the power to direct the relevant activities over the investee typically arises from a right such
as voting rights, the right to choose key personnel or enforcement/veto rights. Power over the
relevant activities would include the ability to direct the selling or buying of goods and
services, direct research and development, budgeting, and the management of financial assets.
Second, variable returns are defined as not fixed and with the potential to vary as a result of
the performance of the investee. Finally, there must be a link between the power to control the
relevant activities and the return on the investment.
Solutions
2/1/2026Manual
Practice
for Questions
Advanced
Solutions
with
Financial
Manual
Answers
Accounting
for
? Advanced
A+Grade
in Canada,
Financial
1stAccounting
Canada Edition
in Canada,
by Johnstone
1st Canada
Nathalie.pdf
Edition byPractice
Johnstone
Questions
Nathalie
with Answers ? A+Grade
